(Reuters) - Egypt enters the last stage of its first democratic presidential race on Monday with its field narrowing to a two-horse race between the urbane former head of the Arab League and a charismatic Islamist medic jailed for years under Hosni Mubarak.

A poll published in state-run al-Ahram daily on Monday showed veteran diplomat Amr Moussa in the lead, followed by Abdel Moneim Abol Fotouh, who has emerged in recent days as the leading Islamist candidate after securing the support of the ultra-conservative Salafist movement.

Both men are well ahead of 11 other candidates and, for now, look the most likely to face each other in a second round. That would give Egyptians a stark choice about the future of the Arab world's most populous state.

Moussa, 75, served for a decade as Mubarak's foreign minister before taking over the leadership of the Arab League, and must win over voters skeptical of the old elite.

Abol Fotouh, 60, grew to prominence in the 1970s as a student activist opposing Egypt's military rulers and was jailed in the 1990s as a member of the Muslim Brotherhood, which he split from last year. He needs to maintain the support of Islamists, while reassuring secular Egytians he will not impose a radical transformation on society.

Monday marked the official start of campaigning for the election, although candidates have been canvassing voters for months. A first round will be held on May 23-24, followed by an expected second round run-off in June.

Though they appear to be the clear leaders, it is still not certain Moussa and Abol Fotouh will make it to the second round: many voters are undecided and polls have no track record of accuracy. The Muslim Brotherhood has a candidate challenging Abol Fotouh for Islamist votes, and can never be written off.

"Nobody can talk about forecasts because in Egypt there are no scientific opinion polls. They are all impressions," senior Brotherhood official Essam El-Erian told reporters.

The election could prove to be one of the most important turning points in the Arab Spring of revolts that swept across the region since last year, bringing down the leaders of Tunisia, Libya and Yemen as well as Egypt's Mubarak.

Egypt's revolution has been an unfinished project. Since Mubarak was swept out by popular protest, generals have ruled uneasily, their tenure punctuated by bouts of violence, political quarrels and spiraling economic decline.

In recent days, unrest has rattled ties with Saudi Arabia, once a close ally. The West is closely watching the race in the first Arab state to make peace with Israel.

UNPRECEDENTED SPECTACLE

Moussa has generally led in the polls till now, benefitting from better name recognition than others. Abol Fotouh's growing appeal could make the race tighter. Some may yet be swayed by the unprecedented spectacle of a televised debate between the top candidates, the first of which is scheduled for Thursday.

Islamists have been on the rise since Mubarak fell. The Muslim Brotherhood, banned under Mubarak, won parliamentary elections four months ago, followed by the Salafists, who call for an even stricter reading of Islamic law.

Abol Fotouh broke away from the Muslim Brotherhood last year when it initially said it would not field a candidate.

He has solidified his position as the leading Islamist in the race by securing the backing of the ultra-conservative Salafists, but portrays himself as a moderate, keen to reassure secular Egyptians and Christians they have nothing to fear. He has played up issues of economic and social justice and promised to increase health and education spending.

"It's the Egyptian mainstream I am banking on, the ones I have been working to win over since I started my campaign, who make up more than 90 percent of Egyptians ... who understand sharia (Islamic law) correctly," he said in an April 23 television interview. "Wherever we look out for people's interests, we serve them, we are implementing God's law."

Abol Fotouh long clashed with the Brotherhood's leadership by advocating a more open approach to Egyptians from different social, political and religious backgrounds. Leading Salafis have acknowledged ideological differences with him, but have been drawn to a charismatic figure whose break with the Brotherhood gave him credibility as an independent voice.

Some liberals and more secular-minded Egyptians have also rallied behind him. Unlike Moussa, he has no links to Mubarak's era. But many Egyptians remain suspicious that he still holds ties to the Brotherhood that could surface in his presidency.

The Brotherhood reversed its decision not to field a candidate, but its first choice was barred from standing. Its replacement candidate, Mohamed Mursi, has a low profile so far and starts well behind in polls, but stands yet to gain from the support of the Brotherhood's unrivalled grassroots organization.

Senior Brotherhood official Mahmoud Ghozlan said rank and file Salafis could still back Mursi, even though their leaders picked Abol Fotouh.

As the largest group in the new parliament, the Brotherhood has clashed with the military rulers over who should appoint the cabinet, and with other Islamists and liberals over the make-up of a 100-member panel drafting a constitution, now stalled.

OLD GUARD, NEW GUARD

Moussa, who became popular with ordinary Egyptians as head of the Cairo-based Arab League, has to fight accusations by Islamists that he is a member of Mubarak's old guard.

"The question is not old guard or new guard. The question is either you were part of the corrupt people that have done a lot of harm to the country or among the people who have worked and done their duty according to the highest standard they could do," Moussa told Reuters last year early in campaigning.

Many Egyptians fondly remember how Moussa regularly criticized Israeli policies and in 2003 warned against the U.S-led invasion of Iraq, saying it would "open the gates of hell."

He benefits from fear of religious radicalism. Asked about his Islamist rivals last week, Moussa said Egyptians should "not get into an experiment that has not been tried before."

While Egypt has limped through the political transition, the economy has taken a nose-dive. Foreign reserves have plunged and talks with the International Monetary Fund on a loan facility seen as vital for restoring confidence have foundered.

Egypt's economic prospects may have taken a further hit on Saturday when Saudi Arabia, a long-time ally of Mubarak and potential donor, recalled its ambassador over protests outside its embassy against the Saudi arrest of an Egyptian lawyer.

"The current crisis between Egypt and Saudi Arabia will be contained, given the solid relations between the two countries which transcend any problem," Planning and International Cooperation Minister Faiza Abu el-Naga said on Sunday.